TRUE or FALSE. Agency costs of managerial discretion are one of the few costs that are not exacerbated when a firm is under financial distress. a. TRUE b. FALSE ANSWER B
Date: September 19th, 2020
The ABC system is an inventory management technique for determining the optimal order quantity for an item of inventory. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
If one firm in a given industry declares bankruptcy, the market may lower the values of other firms in a given industry because the reveals new, negative information about the status of the industry as a whole. This phenomenon is called: a. the contagion effect. b. the intra-industry wealth transfer effect. c. irrational behavior. d. […]
Date: September 19th, 2020
The reorder point is the point at which a firm receives orders. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
Since its objective is to minimize inventory investment, a Just-in-Time (JIT) system uses no, or very little, safety stocks. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
Contract devices explicitly designed to thwart a hostile takeover attempt are called poison pills or shark repellents. Examples include all of the following EXCEPT: a. a shareholder rights plan that can be issued as dividends at management’s discretion. b. an event-triggered put provision in one of the firm’s debt contracts. c. a provision in the […]
Date: September 19th, 2020
Safety stocks are extra inventories that can be drawn down when actual lead times and/or usage rates are greater than expected. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
State legislation designed to thwart takeovers has been enacted in recent years, including _, which can delay the consummation of business combinations for years. a. business combination laws b. voting share reprisal laws c. takeover postponement laws d. control share laws ANSWER A
Date: September 19th, 2020
For minimizing the cash conversion cycle, a firm should ________. A) grant longer credit terms to customers to maintain healthy business relations B) pay off accounts payables as fast as possible to gain credibility C) turn over inventory as quickly as possible without stockouts D) increase mail managing, processing, and clearing time when collecting from […]
Date: September 19th, 2020
TRUE or FALSE: A merger announcement induces a substantial positive abnormal return on the acquiring firm’s stock (approximately 20%, on average), while the target firm’s stockholders are either unaffected or sustain small losses, on average. a. TRUE b. FALSE ANSWER B
Date: September 19th, 2020
